A cadre of Chinese creditors are suing struggling property developer China Evergrande for over $13 billion in payments they claim to be overdue, as domestic companies owed money by Evergrande try to beat out overseas bondholders to receive repayment, reports the Financial Times. A Chinese court assigned to handle civil lawsuits against Evergrande has accepted 367 cases with claims totaling RMB 84 billion ($13.2 billion). The claims were submitted between August 24 and December 9, when the group was declared to be in “restricted default” by Fitch Ratings.
Analysts said the timing of the claims demonstrated that domestic creditors had lost confidence in the ability of Evergrande, the world’s most highly leveraged developer, to pay off its debts well before the default declaration.
The influx in creditor claims began when the central bank criticized Evergrande management in August over its debt crisis, triggering a collapse of the group’s sales and further restricting its access to financing. Days later, Evergrande warned that it was at risk of default.